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This is a ten question multiple-choice quiz covering the material in this Unit. I hope you do well!

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Question 1 of 10

1. Question

10 points

Marginal production of labor is:

the additional production per worker.

the total production per worker.

the total production divided by the number of workers.

the difference between the average production of labor.

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Question 2 of 10

2. Question

10 points

Examples of fixed inputs in the short run typically are:

The amount of land and the factory used for production.

Employees paid by the hour.

Raw materials.

Office supplies.

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Question 3 of 10

3. Question

10 points

If a business adds a variable input (labor for example) to a fixed input (office space, machinery, etc.), then its output will:

increase for a while, then decrease after a certain amount of the variable input.

increase indefinitely as long as it keeps adding the variable input.

decrease for a while, then increase after a certain amount of the variable input.

decrease indefinitely as long as it keeps adding the variable input.

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Question 4 of 10

4. Question

10 points

If a firm’s total production increases from 30 products to 45 products as a result of hiring 3 additional workers, then the firm’s marginal product of labor for these quantities is:

5

8

2

28

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Question 5 of 10

5. Question

10 points

Labor TP MP AP
0 0
2 50
4 35
6 40
8 300

In the above table, TP represents total production, MP is marginal production, and AP refers to average production. What are the total production and marginal production of workers 5 and 6 (the values in the row for labor = 6) are, respectively?

240; 60

250; 23.75

155; 25.83

150; 150

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Question 6 of 10

6. Question

10 points

If the real interest rate is 4 percent, and inflation is 6 percent, then the nominal interest rate is:

10 percent.

14 percent.

2 percent.

minus 2 percent.

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Question 7 of 10

7. Question

10 points

If someone promises to give you $20,000 in exactly three years, how much is this worth to you today if the going interest rate is 4%?

$17,779.93

$16,615.38

$18,400.39

$19,070.29

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Question 8 of 10

8. Question

10 points

The economic definition of a firm’s “long run” is:

when all of the firm’s inputs are variable.

a period of time that is one year or longer.

when all of the firm’s variable inputs are fixed.

a period of time longer than three (3) years.

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Question 9 of 10

9. Question

10 points

Let’s assume that a business is operating in the short run. When it uses 1 building, 5 machines, and 2 workers, it produces 25 products. When it uses 1 building, 5 machines, and 4 workers, it produces 50 products. When it uses 1 building, 5 machines, and 6 workers, it produces 100 products. When it uses 1 building, 5 machines, and 8 workers, it produces 165 products. When it uses 1 building, 5 machines, and 10 workers, it produces 240 products. When it uses 1 building, 5 machines, and 12 workers, it produces 275 products. When it uses 1 building, 5 machines, and 14 workers, it produces 292 products. With the hiring of which workers does the law of diminishing marginal returns begin?

12

10

6

8

Correct

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Incorrect

Question 10 of 10

10. Question

10 points

Labor TP MP AP
0 0
2 50
4 35
6 40
8 300

In the above table, TP represents total production, MP is marginal production, and AP refers to average production. What are the total production and marginal production of workers 7 and 8 (the values in the row for labor = 8) are, respectively?